Guide to U.S. Anti–Money Laundering Requirements: Frequently Asked Questions (2nd Edition)

Published by Protiviti; available for free download at www.protiviti.com; copyright 2005; 122 pages

Reviewed by Jeffry R. Haber

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The guide uses a question-and-answer approach to cover what anyone working in AML needs to know. For someone new to AML, the guide is indispensable. The best parts are the appendices; these alone would still be a valuable reference. Even the most experienced and knowledgeable AML expert would want these appendices handy. The appendices are:

• Commonly used acronyms;
• AML/BSA (Bank Secrecy Act) statutes and regulations; and
• Pertinent websites.

A question-and-answer format can be difficult to manage. While questions can be selected and framed to follow a logical and sequential path through the material, they are not as clear and understandable as standard prose. The 475 questions are organized into the chapters of fundamentals, BSA, the Patriot Act, customer identification programs, risk assessments, the AML program, transaction monitoring, the Office of Foreign Assets Control (OFAC), implementation of AML laws and regulations, nonbank financial institutions, and nonfinancial institutions.

For the professional new to AML, this organization takes the reader from the earlier act (BSA) through the sweeping Patriot Act, discussing the general rules and application. The guide then discusses the rules and regulations from the industry perspective, so the reader could use the table of contents to focus on a particular industry classification. In some ways, this organization can be very useful, asking questions that the newcomer may not have thought of, while still conveying basic information. In other ways, this organization can be superficial. For the professional with an intermediate level of knowledge, this organization may be less useful, because specific questions may not be covered as directly as necessary. Particularly when working in the field, these professionals would be looking for an answer to a particular situation. They would still need to consult the applicable act to determine the proper course of action. For the individual with an advanced knowledge of AML, the questions and answers will provide no new information. Again, however, the appendices will prove useful for professionals of any experience level.

The guide also contains useful tips called “best practices” (in a question-and-answer format). Common in AML is a standard form called a suspicious activity report (SAR), which is to be filed under certain broadly defined circumstances. There are penalties for not filing a SAR, as well as ramifications for excessive SAR filings. The guide does an evenhanded job of conveying government guidance on when to make a SAR filing. Perhaps to the contrary of what one would imagine, the government believes that filing unnecessary SARs dilutes the investigative value of the SAR, and it does not want to receive SARs simply because filers want to protect themselves. The guide clearly discusses criteria for when SARs should, and should not, be filed.

This reviewer would have preferred to see a narrative summary of the major legislation, perhaps 10 to 15 pages on each act, prior to starting the question-and-answer format. This would have put the acts into proper context prior to discussing them through Q&A. A few questions were worded less clearly than they could have been, but this is not a significant shortcoming.

The guide is offered as a free download through the Protiviti website (www.protiviti.com). Everyone involved in AML should get the appendices, even if the rest of the material is too basic for their needs.

The target audience for this guide would be CPAs who have just acquired a client that has AML issues, companies just coming under AML regulations (such as the jewelry industry), and employees new to the field. As an introductory reference, it is a quick and valuable read. Professionals more advanced in the subject will not find the guide to be very useful. Perhaps examples or anecdotes would make the guide more compelling for the advanced AML practitioner. As it is, however, the guide should be downloaded by anyone getting started in AML work.